The secret of Netflix's attack is not the quality of the content, the commercial operation

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Note: People all over the world are watching the House of Cards, and the show and the Netflix behind it are being pursued in the field of television and video media. Netflix also took the spotlight at the just-concluded Oscars, with a documentary on the lady in number 6 who won her first Oscar award (the best Documentary short story). But the documentary is not Netflix's homemade, but Netflix bought the documentary's release and the exclusive right just a week ago! It's worth the money at the Oscars. Really familiar with the road of brand building Internet companies!

Slate magazine commentator Matthew Yglesias wrote a similar view, from the level of production, Netflix's homemade drama does not have HBO (classic series including "Brothers" "Ice and Fire song," etc.) well produced, but why so successful? The focus is not on the quality of the original content, But in business. The full text is compiled by Titanium Media:

"If away, lush/Titanium media compilation" Like most Washington residents, I spent a lot of time at the weekend chasing the card house, because I missed the first season inexplicably, so this time I started chasing the tail from scratch. In addition to the eagerness to rush into the next episode after watching one episode, the first thing that struck me was--I found out that Solitaire was not a particularly good piece (TV critic Willa Paskin also agree with me). Of course, the show has the external conditions to become a popular drama: Fincher (David Fincher), starring in Spacey (Kevin Spacey), has a sense of danger in the lens, how could it not be!

To put aside these superficial factors, the work is simply not comparable to HBO's "Monitor" (the Wire) and the "Sopranos" (The Sopranos). The Director of the House of Cards did not want to discuss the reality of the human situation with us audiences, but it is a good way to look at how the American political system works, but it does at best explain why the bizarre situations of political circles cannot unfold in real life.

But these do not prevent me from continuing to watch. Why? All of them can learn a lesson:

The Teide Salandes of Netflix's chief content officer, Ted Sarandos, is well known, and he admits that Netflix's challenge is "to become HBO before HBO becomes us." "Salandes has had the upper hand so far, but that's not just because Netflix's CEO Ride Hastings (Reed Hastings) is brilliant, and I don't mean to say that HBO's leadership has no brains."

The reason why Netflix is a winner comes down to the characteristics of technology-driven change, which is that essentially technology-driven change tends to be "greener". In other words, in the promotion of technological innovation, the older generation of the company has formed a structural advantage will become a disadvantage, so the new generation of companies naturally more popular.

Win point one: no bundled services to meet the needs of network users

Netflix, from birth to popularity, boils down to a word that is now annoying to abuse: subversion. The ratings are relative to those who run pay-TV rivals. Netflix certainly has some advantages over them, and these advantages are enough to replace the quality of the content and become a powerful tool for Netflix to win the race. Netflix's rivals are in a vicious circle, where the business logic they once pursued has become a stumbling block, making it impossible for them to catch up on some aspects of Netflix's good.

Most obviously, using Netflix is much cheaper than HBO. HBO is a pay mechanism, and paid subscribers generally receive HBO's offer, but the premium TV channel serves a basic monthly fee of $15-20-a much higher price than Netflix's offer. This is a serious problem for HBO. For viewers, HBO offers an extra content outside the basic cable TV package, in other words, the HBO service is not essential, it's just an option.

As the market for cable TV is less competitive (similar to domestic cable-TV regional monopolies), users say, "I don't buy basic packages, I use broadband," in this case, only pay-TV content, with my personal experience it's really cheaper than the basic package +HBO paid content source combination (in fact, not a few dollars).

More importantly, HBO tied pay cable to its own survival, which not only increases costs but also reduces operating flexibility. and streaming media service-oriented network services (such as Netflix) is free to choose, different speeds have different prices of the package, the content of cable TV can not be casually priced.

This market environment is only extreme, not mainstream, but they highlight the ability of Netflix: Netflix to meet the wider range of customer needs.

Win point two: HBO's profit model determines it is difficult to own its own life

The embarrassment of HBO is that even if a large audience is willing to buy a standalone HBO Go service (which does not bundle cable services and enjoy video services over the Internet), HBO has plenty of reasons not to offer it. Because the current business of HBO has done quite well: last year, the company's revenues were about $4.9 billion trillion, a little more than the 4.37 billion dollars that Netflix had over the same period. But in terms of operating profits, HBO17 's earnings have left Netflix behind, and Netflix has only 228 million dollars.

With the huge rewards of paying for cable TV, HBO's biggest worry is that rivals are taking away key customers, so does HBO want to aggressively promote its Web services to rival Netflix? For example, do you also vigorously promote "non-core" streaming media services?

Simply put, if HBO follows Netflix, it has to worry about losing existing customers in its core business, and allowing traditional HBO to embrace streaming services that means sacrificing existing high return customers in return for less profitable customers and a Netflix style of profitability.

The embarrassment of "right-handed" is used to describe HBO. Its business model determines that HBO Go cannot be a product independent of pay-TV, and that "each household can only use one HBO Go account" and cannot be transferred to others for many times, this policy has little to do with attracting new paid subscribers.

Netflix has a lot more freedom in this area, and my wife and I have separate Netflix accounts, so Netflix can track our viewing habits and preferences separately, making it easier for Netflix to collect more granular user data and more accurate data-based recommendations. From the perspective of analysis, HBO is not only lagging behind the trend, but also its overall strategy of broadband flow in the first time to prevent the rational collection of analysis data.

Win point three: The drama release mode is flexible

Finally, it is pointed out that Netflix meets the needs of the users of the play, allowing users to watch multiple episodes at one breath. In fact, Netflix is releasing a whole season of episodes in one breath, which is clearly a clever business strategy. Doing so would encourage hardcore fans of the show to feast and watch, bring more repercussions to the show, and create a social atmosphere that is more likely to make the drama hot. In other words, all the fans who have followed the second quarter of the card house are talking about their own feelings of play, which has inspired me to finally turn around and finish all the missed episodes from the first season.

However, just as independent HBO Go products are not suitable for cable companies to get high returns, a one-time release of all episodes is not suitable for larger TV content providers.

In a way, HBO is a much bigger Time Warner. Like Time Warner, HBO has a traditional television network and production company, and once Netflix subverts the traditional television production and distribution cycle and dramatically increases the speed of production and distribution, it hurts the interests of the traditional cable TV organizations such as HBO. HBO, under pressure, will surely be forced to stall the pace of self-improvement.

It's hard to make HBO's decision to innovate. And the local innovation of HBO – such as opening all of its history program "Libraries" at the user's request-is easy to replicate for Netflix.

In combination, although Netflix does not have a lot of experience to create really exciting episodes, there are some factors that are more important than content quality in terms of business operations, which determine the survival of the business, such as cost, convenience, flexibility, and so on.

Netflix has won all these elements. To step back, content quality is the easiest step to improve in some way, stones, while trying to make progress. The 2013 "Card House" is much better than Netflix's first homemade series, "Lilihaimer" (Lilyhammer), which last year's Netflix premiere of "Women's Prison" (Orange is the New black) also surpassed its debut. Of course, to really make progress we have to work hard, and Netflix itself has no vested interest in it, nor any business model to interfere, so it can not hesitate to meet the challenge.

In a place where Netflix is doing well, HBO is unlikely to replicate or threaten its existing business; But where HBO is doing a good job, Netflix can confidently try to replicate it. As a result, Netflix has always been so complementary and thriving.